Last Friday, San Francisco Federal Reserve (Fed) President Mary Daly backed for an interest rate hike of 0.75 basis points at the next central bank meeting which is seen as likely to support the movement of the US dollar.
Apart from that, during last week's trading, several other Fed officials also supported an interest rate hike of 75 basis points to control the rise in high inflation.
United States (US) inflation rose to an annual rate of 8.6% in May, the highest in 41 years and a factor increasing the risk of a US economic recession.
While developments in the UK, United Kingdom (UK) Prime Minister Boris Johnson is set to pursue legislation to repeal rules on post-Brexit trade with Northern Ireland to replace parts of the agreement already agreed in 2020 by the UK and the EU. However, the risk of an agreement failing to be signed could trigger a trade war.
This will totally impact a passive movement for the Pound even though the central bank of England (BOE) at its latest policy meeting has raised interest rates.
If we look at the price movement on the chart of the GBP/USD pair, until the beginning of this week's trading opening, the price is still hovering in the horizontal zone with the support level at 1.22000 while the resistance is at 1.23000.
In last Friday’s trading as well, the bulls also seemed to fail to overcome the resistance at the 1.23000 high to close the trade in the last session of last week around the bottom of the zone.
The price which was seen moving horizontally above the Moving Average 50 (MA50) level on the 1 -hour time frame last Friday has given an early signal for a bullish movement with the price still hovering above that level in the Asian session today (Monday).
If the rise is successfully broken this week breaking the resistance of 1.23000, the price will make a higher rise towards the level of 1.24000 which is the high level reached during the price reaction at the last BOE policy meeting.
The higher rise that is still successful will lead to the next target at the resistance zone 1.25000 to continue to record the latest highs.
On the other hand, if the price makes a decline, the price support level at 1.22000 will be tested again and if the price manages to break it, a lower decline is likely to first test the focus level around 1.21000.
The continued decline for a clearer bearish movement is expected to hit back to the key support zone at the 1.20000 zone.
